Ranpak Holdings Corp.

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the RANPAC fourth quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star 1. I would now like to turn the conference over to Sarah Horvat, General Counsel. Please go ahead.

Thank you, and good afternoon, everyone. Before we begin, I'd like to remind you that we will discuss forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K and our other filings filed at the SEC. Some of the statements and responses to your questions in this conference call may include forward-looking statements that are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. RAMPAC assumes no obligation and does not intend to update any such forward-looking statements. You should not place undue reliance on these forward-looking statements, all of which speak to the company only as of today. The earnings release we issued this afternoon and the presentation for today's call are posted on the Investor Relations section of our website. A copy of the release has been included in a Form 8-K that we submitted to the SEC before this call. We will also make a replay of this conference call available via webcast on the company website. For financial information that is presented on a non-GAAP basis, we have included reconciliations to the comparable GAAP information. Please refer to the table and slide presentation accompanying today's earnings release. Lastly, we'll be filing our 10-K with the SEC for the period ending December 31, 2023. The 10K will be available through the SEC or on the Investor Relations section of our website. With me today, I have Omar Asili, our Chairman and CEO, and Bill Drew, our CFO. Omar will summarize our fourth quarter results, provide an update on our growth strategies, and issue our outlook for 2024. Bill will provide additional detail on the financial results before we open up the call for questions. With that, I'll turn the call over to Omar.

Thank you, Sarah, and good day, everyone. Thank you all for joining our call. We finished 2023 on a positive note as we built on the momentum from the third quarter and delivered our best quarter of the year. We saw continued general improvement in the operating environment in Europe and a more pronounced holiday season in North America compared to prior year. Overall, the e-commerce discretionary goods market and manufacturing sectors remain subdued, but we are starting to see general improvement across many of our end users and are encouraged by the seasonal uptick more in line with historical patterns in the fourth quarter. Consolidated net revenue on a constant currency basis increased 10%, driven by volume growth in our different regions as we saw improved order activity among larger e-commerce customers in the U.S. and generally improving conditions in Europe. The volume improvement seen in Q3 and Q4 helped drive 2023 full-year net revenue up 1% on a constant currency basis, a welcome recovery from a slower start of the year. Europe and APAC finished on a strong note, up 12% on a constant currency basis, driven by 15% volume growth as ordering patterns continued to normalize and general sentiment in the region was stable. The improvement was broad-based, as all PPS categories in the region were up year over year. De-stocking activity is behind us, and in many cases, distributors and end customers are working to keep as little inventory on hand as possible. Our North America business also experienced an uptick to finish the year, with sales up 8% driven by improved volumes and contribution from automation sales. Full year results were up 2% in North America driven by a larger contribution from automation and improved Voight-Hill performance, offset somewhat by sluggish trapping and cushioning environment. Adjusted EBITDA of $24.4 million was up $11.5 million, or 89%, in constant currency terms year over year, and resulted in a margin of 26%. The increase in adjusted EBITDA was due to higher sales volumes compared to a year ago, significant improvement in input costs, and better absorption of our fixed GNA. For the year, adjusted EBITDA increased 14.5% to $76.5 million. Overall, it was a quarter that turned out a bit better than expected and helps us to finish a challenging year on a positive note. Generally speaking, we entered 2024 in a better operating environment than we experienced in 2023. Discretionary goods remain soft, but we are now two years into absorbing the pull forward in demand that impacted performance in 22 and 23. Strategic account activity in North America is robust, with key players announcing their commitment to eliminating plastic in their fulfillment centers over the next few years. We also have made substantial inroads with our automation business with key accounts that I think solidifies our position as a true automation player. Our distributors and end users are in tight inventory positions and are likely conservative in their positioning. We continue to monitor the energy environment in Europe. It is far improved from a pricing perspective from a year ago, as Dutch Nat gas is at 27 euros per megawatt, down from 300 euros at the peak and 80 euros at the start of 2023. This has led to a stable paper input cost environment in the region and improved overall sentiment. North America paper pricing also remains stable as we enter into 2024, having clawed back the majority of our gross margin profile that we had sacrificed in 22. The regulatory environment continues to position us with a secular tailwind as extended producer responsibility regulation has been enacted or proposed in many states including California, Colorado, Maine, Oregon, Maryland, New Jersey, Washington, and Connecticut. These laws have been in place in Europe for years, but are just gaining traction in the U.S. We'll take you through our guidance for 2024 after Bill's remarks, but to summarize, we are focused on accelerating top line growth this year, double digit adjusted EBITDA growth, and working the investments we have made to generate cash and deliver. Now, here's Bill with more info on the quarter.